Indian Quick Commerce Sector Projected to Attain $50 Billion in GOV by FY30
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New Delhi, Jan 7 (NationPress) The Indian quick commerce sector is projected to reach $50 billion in gross order value (GOV) by FY30, which corresponds to 60 million customers placing orders eight times per month, as per a report from HSBC Research published on Tuesday.
This represents a substantial segment of the total addressable market (TAM) within a span of five years. While this target is not unfeasible, achieving it will be challenging, according to the report.
“We remain optimistic about the quick commerce potential in India. However, market expectations are becoming increasingly demanding. We believe that the TAM (total addressable market) for this sector is considerably smaller than generally perceived,” the report noted.
Through a bottom-up analysis, it was determined that the grocery TAM for the top 30 cities does not exceed $125 billion. This estimation is based on an assumption of Rs 30,000 spending per household per month. Additionally, smaller towns present scaling difficulties, primarily due to their lower delivery payment tendencies.
“This may not pose immediate concerns as growth is expected to remain robust with ongoing supply expansion in 2025, but apprehensions may arise in the next 2-3 years,” the report indicated, emphasizing that delivery fees are essential for business sustainability.
To further enhance margins, there may be a necessity to increase delivery charges and take-rates (operating leverage on corporate expenses will also contribute).
“This will likely reduce the TAM significantly. Delivery fees for grocery items (as opposed to food delivery) may narrow the target audience as we anticipate that a large portion of the Indian market will remain budget-conscious. This could present a challenge as companies aim to expand beyond major cities,” the report highlighted.
By FY28 and FY30, the report forecasts that the overall quick commerce market size will be $30 billion and $50 billion, respectively.
“The speed of diversification into non-grocery items and the shift from e-commerce to quick commerce are crucial. Many companies are branching out beyond grocery to include general merchandise. The number of stock-keeping units (SKUs) has surged from 2,000 two years ago to 15,000-20,000 now,” stated HSBC Research.
Moreover, leading e-commerce giants such as Flipkart and Amazon are aggressively venturing into quick commerce, which is likely to result in a value shift from e-commerce to quick commerce in the short term.
This trend should facilitate industry growth beyond grocery, aiding the anticipated GOV increase and providing some assurance for at least short-term growth, as reported.
